The One Definition to Elevate Your “Strategy” For Success
What is a Strategy, really?
As someone who has been doing strategy, it has actually never been clear to me what a strategy really is.
As a strategy consultant, strategy is more of a job.
There is a structured methodology to generate strategies. Based on extensive internal and external researches and analysis, a “vision” is generated and then it is broken down into actionable initiatives with “clear” milestones, timelines and persons in charge.
The approach is logically sound and convincing for the clients.
However, to most consultants (like me), it is hard to really make sense of the strategy intuitively. I know how it is logically generated, however, I could not picture and comprehend how it is really like when it is executed and achieved.
It is like a freshly graduated military commander trying to prepare his army for battle.
He can read the map, just as he was taught, but he cannot actually see the landscape, the mountains and rivers etc.
He knows where he should place his troopers, but he can not really picture how the battle will play out and exactly when he should send in his reserves to deliver the final blow.
Without the extensive experience in leading an organization to achieve a brilliant strategy, it is just too complex for me to comprehend intuitively.
I envy my Partners. They really seem to have the concrete picture on how each phrase will play out and what the contingencies will be if any of them does not.
For me, I always lacked a bit of confidence for strategy engagements and tried to avoid them if I can.
And I thought to myself that I should just settle for providing inputs for my Partners who have the required experiences to make sense of it and ultimately convince the client CEOs.
By the way, if you have a strategy job in corporate, it could be even worse. You could seldom do strategy work. Instead, most of your time is spent on following processes and making compromises.
So I was ready to stay away from “real” strategy until I was ready.
Last week, I read about a definition of strategy that immediately resonated with me and helped me picture the path ahead.
Strategy = Clear Goal + Specific Point for Optimization
Most corporations can do this well now.
A simple SMART tool can go a long way.
2.Specific Point for Optimization
Now this is the key part.
After having a goal, our automatic reaction is to break down the goal into actionable initiatives and then assign them to different departments or teams.
Manufacturing needs to increase the throughput by 20% and reduce defects by 50%.
Procurement needs to achieve xx Million savings and achieve 99% OTIF (on time in full) delivery.
Human resources needs to hold x career talks and recruitment drives covering x top schools and recruit xx management trainees.
Most of the time, the end goal is lost in the process of people rushing for goals of each department.
This is called “doing what you can”.
This is opposite to identifying the “Specific Point for Optimization”.
We all realize the fact that we are always subject to resource constraints.
To achieve the best impact, we need to focus the resources on the “Specific Point for Optimization”.
Therefore to find that point is critical.
“Doing what you can” as above, we are completely giving up looking for that point, which is the lazy and probably the worst approach.
So what is that “Specific Point for Optimization” and how to find it?
The “point” need to satisfy below 2 requirements:
1.It is something we can actually improve given the current resources
Trying to improve government efficiency or push the economic development to the next level will be a long shot and we can have very little impact on it if any with the resources available.
However, studying the top performers in the current political and economic situations and adopt their best practices is something we could do well with the available resources in a relatively short period of time.
Constraints are a reality that we need to accept as the pre-fixed condition. So focus your resources on what you can change.
2.It is something doing which will create a positive flywheel
Once the “Point” is moved, many positive things will follow.
For example, Amazon’s point is “improving customer experiences”. So all their efforts are centered around it, which created the flywheel.
Better customer experiences -> more customers -> more vendors -> more products and better prices -> better customer experiences.
If they also focused on bringing in vendors, that would be “doing what you can”.
So how to find the “Point”?
Unfortunately and fortunately, we may need to try multiple times. Yes, “trial and error” might be the only way.
However, once we find it, it will all be worth it!
It will not only make successful corporations, but also successful lives.
For example, if you want to improve your son’s math grades, the point could be to prepare a collection of “wrong questions” and make sure he sticks to it: collect all the questions he did wrong and re-do them after the exams.
If you also focus on getting him more exercises, making him eat more and sleep more or getting him extra tuition, that would be “dong what you can”. And this approach will most probably harm your relationship with your son, which is more valuable.
The critical component for a strategy is really to identify the “Specific Point for Optimization” and stick to it.
Of course, the risk of sticking to the wrong “Specific Point for Optimization” always exist.
For example, USA tried to ban alcohol only to make the black market flourish.
The goal was clear for sure. But “Specific Point for Optimization” was wrong.
They tried to destroy the black markets and secret societies. However, destroying one would lead to two more in the face of the vastly profitable business which was becoming even more profitable.
The “Point” here could be to change of the perception of society: drinkers are not “Cool” but “Losers”.
Fortunately, if we keep a clear logic, it wont be hard to find out when the “Point” is wrong!
Recalling some of the strategies we did for our clients, some of them included more than a dozen “strategic” initiatives.
Sometimes, we even purposely increased the number just to make sure every department had their share.
No wonder I could not picture the way forward. How could I? Any of the initiatives could go side ways.
And I recall that my Partners almost never explained all the initiatives during the presentation.
They focused on a selected few, which they really elaborate to convince the CEOs.
And for the rest, they simply used something like “Of course, we need the help from every department”.
Maybe it is just a way for stakeholder management so that all the VPs present do not feel left out.
Maybe the partners and the CEOs somehow reached the common understanding what that “Point” would be.
Maybe that is the key in being a good strategy consultant! Funny that I never realized this as a consultant!
Putting the past aside, what we could learn from this definition is to really take the time to identify the “Specific Point for Optimization” and stick to it.
This is really how “Long-Term” thinking can work to its best!